FTC Settles with "Fake News" Acai Affiliate Marketers
On Wednesday, six online marketers agreed to settlements with
the Federal Trade Commission ("FTC") that will
permanently halt their allegedly deceptive practice of using fake
news websites to market acai berry supplements and other
weight-loss products.
Last summer, the FTC successfully halted the operation of sites
operated by the six marketers. The FTC alleged that websites were
designed to look like legitimate news reports, but were in truth
commercial advertisements intended to drive consumer purchases
of Acai berry-based weight-loss products. The websites often
purported that the story related by the "reporter" had
run on or in major media outlets such as ABC, Fox News, CBS, CNN,
USA Today, and Consumer Reports.
Acai berry supplements are derived from the berries of acai palm
trees, which are native to Central and South America. Supplements
and other products contacting acai are frequently marketed to
consumers as a weight-loss aid.
The settlements require the marketers to make it clear to consumers
that their commercial messages are advertisements and not objective
journalism, disclose to consumers any material connections they
have with merchants, and collectively pay approximately $500,000 to
the FTC. The settlements also bar the defendants from making future
deceptive claims about health-related or any other products.
FTC, Consumer Financial Protection Bureau Sign Memorandum of Understanding
On Tuesday, the Federal Trade Commission ("FTC") and
the Consumer Financial Protection Bureau ("CFPB")
announced an agreement to coordinate
consumer protection efforts and avoid duplication as both
agencies perform their law enforcement and regulatory missions. The
CFPB was created after the passage of the Dodd-Frank Wall Street
Reform and Consumer Protection Act ("Dodd-Frank") in
2010. The Act requires the CFPB and the FTC to coordinate
enforcement activities and promote consistent regulatory treatment
of consumer financial products and services.
In the MOU, the two agencies have agreed to:
- meet regularly to coordinate upcoming law enforcement, rulemaking, and other activities;
- inform the other agency, absent exigent circumstances, prior to initiating an investigation or bringing an enforcement action;
- consult on rulemaking and guidance initiatives to promote consistency and reflect the experience and expertise of both agencies;
- cooperate on consumer education efforts to promote consistency of messages and maximum use of resources; and
- share consumer complaints.
NAD Finds Support for WhoNu Cookie Nutritional Claims
On Wednesday, the National Advertising Division
("NAD") of the Council of Better Business Bureaus
announced that it had determined that Suncore Products, LLC can
substantiate certain nutritional claims the company made in
Internet, print, and television advertisements for its "WhoNu?
Nutrition Rich Cookies." The claims included that each
three-cookie serving of WhoNu cookies contained:
- "As much Fiber as a bowl of oatmeal;"
- "As much Calcium and Vitamin D as an 8 oz. glass of milk;"
- "As much Vitamin C as a cup of blueberries;"
- "As much Iron as a cup of spinach;"
- "As much Vitamin E as two cups of carrot juice;"
- "As much Vitamin B12 as a cup of cottage cheese and fruit;"
- "As much Vitamin A as an 8 oz. glass of tomato juice;"
- "Each...serving has 3 grams of Fiber, is an excellent source of Calcium, Iron, Vitamins A, B12, C, D & E, and has a total of 20 essential vitamins and minerals."
NAD also examined whether the advertising implied that eating a
serving of the cookies was equivalent to consuming a serving of the
comparative foods. The self-regulatory body determined that
consumers were likely to understand that the comparison between the
cookie and the comparative food were limited to the specific
nutrient called out in the claim.
NAD also noted that SunCore avoided direct comparisons to whole
fruits and vegetables, did not recommend the cookies as a
substitute for healthy snacks and did not depict the actual healthy
foods used in the comparisons on the product's
packaging. In the past, NAD has expressed concern in
previous cases about advertising claims for snack foods that make
direct comparisons to whole fruits or vegetables.
Go here to read the NAD's
press release on the findings.
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